WEEK 7 ASSIGNMENT
PARMI PANDYA
COLLEGE OF BUSINESS, WESTCLIFF UNIVERSITY
ECO700/244-306-A - IRVINE PROFESSIONAL - SPRING 2024 - SESSION
4
PROFESSOR SALAS-AMARO
APRIL 18TH, 2024
CLOSING CASE IKEA ENTERING INDIA, FINALLY!
• By analyzing IKEA's decision-making process,
market research efforts, and entry strategies,
the study’s challenges and opportunities
encountered by the Swedish home furnishings
giant in navigating the complexities of India's
retail landscape.
• Through its meticulous planning and
innovative approaches, IKEA aims to leverage
India's vast market potential while addressing
the unique preferences and dynamics of the
Indian consumer base.
WHAT DO YOU THINK ARE THE
ATTRACTIONS OF INDIA TO IKEA?
MARKET POTENTIAL
CHANGE IN
FOREIGN
INVESTMENT LAWS
POTENTIAL FOR
GROWTH
India's large and
The amendment of laws in
IKEA sees India as a
growing population,
2012 allowing single-
promising market for
brand foreign retailers to
expansion, with plans
establish wholly owned
to open multiple stores
operations in India made it
initially and potential
more appealing for IKEA to
opportunity for IKEA's
expansion into
enter the market without
products.
the need for local
numerous cities in the
along with its expanding
middle class, presents a
significant market
partners.
future.
STRATEGIC LOCATION
IN HYDERABAD, MICROSOFT'S
INDIAN HEADQUARTERS
OFFER IKEA A FAVORABLE
MARKET FOR ITS ENTRY.
INFRASTRUCTURE DEVELOPMENT
WHY
HYDERABAD
AS THE
FIRST
LOCATION
GROWING URBANIZATION
AND INFRASTRUCTURE
DEVELOPMENT MAKE THE
CITY IDEAL FOR LARGESCALE RETAIL.
MARKET RESEARCH
MARKET RESEARCH
INDICATED HYDERABAD'S
APROPOS DEMOGRAPHICS,
PURCHASING POWER, AND
STRATEGIC LOCATION.
BIGGEST CHALLENGES IKEA
FACES IN GROWING ITS
INDIAN OPERATION
CULTURAL ADAPTATION
CULTURAL ADAPTATION
It poses a significant challenge for IKEA to adapt
to Indian aesthetic preferences and lifestyles.
COMPETITION
COMPETITION
It poses a significant challenge for IKEA to adapt
to Indian aesthetic preferences and lifestyles.
SUPPLY CHAIN COMPLEXITIES
Material sourcing and distribution in India
present logistical challenges for IKEA.
REGULATORY ENVIRONMENT
For a foreign company like IKEA, India's regulatory
landscape, including foreign investment policies,
can be complex and time-consuming.
REGULATORY
ENVIRONMENT
SUPPLY CHAIN
COMPLEXITIES
CHOICE OF WHOLLY OWNED
SUBSIDIARY AS THE ENTRY MODE
ENTRY
MODE
BRAND CONSISTENCY
MITIGATING RISK
CONTROL OVER OPERATIONS
With a wholly owned subsidiary, IKEA can
implement its business strategies and maintain
quality standards in India.
BRAND CONSISTENCY
The direct management of operations ensures
consistency in brand image, customer
experience, and product offerings.
LONG-TERM INVESTMENT
IKEA's decision to establish a wholly owned
subsidiary indicates its commitment to the
Indian market for the long run.
MITIGATING RISK
LONG-TERM INVESTMENT
Wholly owned subsidiaries provide IKEA with
greater flexibility and autonomy in decisionmaking than joint ventures or franchises.
REFERENCES
HILL, C. (2022). GLOBAL BUSINESS TODAY (12TH ED.) MCGRAW-HILL HIGHER EDUCATION.
THANK YOU!